Square to buy ‘buy now, pay later’ giant Afterpay in $29 billion deal – TechCrunch

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In a massive deal that rocks the fintech world, Square announced today that it’s acquiring an Australian buyout now, and later paying giant Afterpay in a $29 billion all-share deal.

The purchase price is based on the closing price of Square’s common stock on July 30, which was $247.26. The deal is expected to close in the first quarter of 2022, subject to certain conditions being closed. Afterpay is valued at more than 30% over its last closing price of A$96.66.

Jack Dorsey, Square’s co-founder and CEO, said in a statement that the two fintech giants “share a common goal.”

“We have built our business to make the financial system more fair, accessible, and inclusive, and Afterpay has built a trusted brand that aligns with these principles,” he said in the statement. “Together, we can better connect the Cash app and the vendor ecosystem to deliver more compelling products and services to merchants and consumers, putting the power back in their hands.”

Combining the two companies will create a payments giant like no other. Over the past 18 months, the buy now, pay later space has essentially exploded, attracting particularly younger generations who are drawn to the idea of ​​not using credit cards or paying interest, and instead opting for installment loans, which are becoming ubiquitous online and in the sale. Retail stores.

As of June 30, Afterpay served more than 16 million consumers and nearly 100,000 merchants globally, including major retailers across industries such as fashion, homeware, beauty and sporting goods, among others.

The companies’ statement said the addition of Afterpay will “accelerate Square’s strategic priorities” for its cash app and seller ecosystem. Square plans to integrate Afterpay into its existing Cash App and Seller business units, so that “smaller merchants” can offer to buy now, and pay later at checkout. The integration will also give Afterpay customers the ability to manage installment payments directly in the Cash app. Cash App customers will be able to find merchants and Buy Now, Pay Later (BNPL) directly within the app.

Afterpay founders and co-CEOs, Anthony Eisen and Nick Molnar, will join Square when the deal closes and help drive Afterpay’s business and consumer business. Square said it will appoint one director for Afterpay to its board of directors.

Afterpay shareholders will receive 0.375 shares of Square Class A stock for each share they own. That means a price of about A$126.21 per share based on Square’s Friday closing, according to the companies.

Will there be more uniformity in space? It remains to be seen, and Twitter is certainly furious about what deals could be next. Here in the US, rival firm Affirm (founded by PayPal co-founder Max Levchin) rolled out earlier this year. On July 30, shares closed at $56.32 well below the opening price and a 52-week high of $146.90. Meanwhile, European competition Klarna – which is growing rapidly in the US – in June raised another $639 million at a staggering after-the-money valuation of $45.6 billion.

There is no doubt that BNPL’s battle for the American consumer is heating up with this deal.

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